Oct 6, 2011

Myanmar To Allow Foreign Land Ownership

The government of Myanmar plans to revise its foreign investment law for the first time in 24 years to lift restrictions on land ownership by overseas investors.

The current government, which took control in March, is believed to be pursuing such reforms in an effort to improve ties with Europe and the U.S. and attract foreign investment.

Japanese firms are showing interest in Myanmar as a potential low-cost production base.The cabinet has already approved the legislative revisions, which could be enacted within six months, said Aung Naing Oo, deputy director general of the Ministry of National Planning and Economic Development.

Under the existing law, foreign investors seeking to build factories or other facilities in Myanmar can only lease land. Allowing overseas firms to own land, however, may help lower costs for equipment industries and other segments that need time to recoup investments.

The proposed reforms are also set to enable companies to convert the foreign-currency-denominated capital required when they invest in Myanmar into the local currency at favorable exchange rates.

Citing the former military-led government's democracy and human rights issues, the U.S. and Europe imposed sanctions that barred investment in Myanmar and blocked imports. But the new government's pro-reform stance is believed to be creating grounds for rebuilding ties. U.S. Sen. John McCain visited the nation in June, while European Union representatives have also traveled there as well.

Members of the Japan Business Federation, the powerful business lobby better known as Keidanren, also plan to visit Myanmar to explore investment opportunities.

Source: Nikkei